I am new to investment property. I have around 40K to invest in property. What should my strategy? Should I start with negative geared property or positve geared ? With negative geared it will be easier since I am able to buy around Sydney area but I dont think there is any luck to find any positive geared property in Sydney. If I am to buy positive geared can I buy more than one properties using the cash I have on my hand. Any smart strategy? Please help….
Buy what you think will make you the most money.
If you have $40,000 deposit, then you can’t buy too many. maybe $400,000 worth of property – if you have the income to qualify for 95% loans.
There are not many cashflow positve properties in sydney, but have seen at least 3 different people buy them this year.
Positive cashflow will help you qualify to service the loans, but you will still need to come up with deposits.If your properties are growing, then there will be no equity to leverage off into more properties.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I have been offered a property in Newtown where the vendor willing to offer vendor finance. I only need to put down $20K deposit. I will able ot save heaps in mortgage insurance. However, the repayment is a killer. Do you think I should take up this offer or rather use my cash for the CF properties ?
What are the growth prospects? I dont know Newtown.
Can you afford the repayments?
Property investing is about time in the market. I prefer growth properties to regional/rural properties.
You could buy properties like these!
1st $130,000
Rent $160 p/w = $693 p/m
Repayments on $104000 loan @ 6.48%= $656 p/m
Deposit @ 20% = $260002nd $120,000
Rent $140 to increase to $150 shortly = $606 p/m @ $140 or $650 p/m @ $150p/w
Repayments on $96,000 @ 6.48% = $606 p/m
20% deposit = $24000Vendor will even leave in $10k -$15k to help with costs etc..
The expected rental return is around $400 a week. Newtown is 5 km from city and 1 km from Sydney uni. It is quite a vibrant and funky little suburb. The location is superb so I think the growth prospects is very good.
Hi Guys,
I am facing a similar problem like Derek. “I have some money and yet to lay my foot in the real estate market, Shall i go for a +Ve or -ve geared property?”
Well i think that my 1st property should be -ve geared so as to claim some tax benefits, as am already in the high tax payer bracket. And perhaps i’ll look for my 2nd IP to be +ve geared.
Kindly advise if am on the right track?Thanx
ShOw_Me_ThE_MoNeY, I owuldn’t decide by just taking into account tax benefits! These are short term benefits, icing on the cake (as Steve calls it).
Derek. Netown is a good area with long term growth potential. next to a uni and a major hospital!! Sounds like a good deal.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Well thanx Terryw!! I need to strengthen my real estate strategies knowledge……. had gone to a book store to pick up Steve’s book….. as i have heard a lot about it but not read yet….. came half way as was cought in the rain….shall get the book on the way back to home….
enjoy
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